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Does ChowNow view cloud kitchens as competitors, and how do they factor into ChowNow's strategy for serving the restaurant industry?

Chris Webb

Co-founder & CEO at ChowNow

I tend to be pretty skeptical and have been skeptical for a while of the ghost kitchen model. 

I'm a big believer in “out of sight, out of mind” and it's just by the very nature of the ghost kitchen model that they're out of sight, and thus, out of mind. 

They're also solely dependent on other companies for distribution—other companies in this case being the delivery apps. 

It's really hard to build a business on top of somebody else's demand engine because, for example, the delivery apps can just decide to unilaterally increase their fees. 

What we hear from independent restaurant owners is they're just not seeing the revenue to justify ghost kitchens. Oftentimes, there's a tremendous amount of churn across independent restaurants at ghost kitchens. This isn't specific to any one of the companies that plays in the space. This is a more general observation.

Where I have seen it working are the massive national brands. The big one that gets toted as being a ghost kitchen success is Chick-fil-A. They’re well-known, the price point of their food is right—all these things set them up well for a cloud kitchen model. 

Those are the kinds of restaurants that seem to be finding success with these ghost kitchen models. They have a huge brand, and they can just look on the map and see where they don’t have coverage, and then they can go out and rent out ghost kitchens there. 

Independent restaurants on the other hand are really struggling to get the ghost kitchen model to work and to be profitable. Many of them have tried it and have decided it wasn't for them.

Find this answer in Chris Webb, CEO of ChowNow, on the new restaurant stack
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